Paul Singer, of Elliott Management, should look into Canfor.
He should take an activist position in Canfor and put in new directors and fire all of the management, starting with Don Kayne.
Since August of 2019 when Jimmy Pattison made his low-ball takeover attempt, Canfor has significantly underperformed versus its two main peers, West Fraser and Interfor.
Don Kayne, CEO, was put in charge by Jimmy back in 2011. Kayne recommended to the minority shareholders that they should accept Jimmy's low-ball takeover offer.
What a horrible decision that would have been for minority shareholders if they listened to Don Kayne.
Since Jimmy's August 2019 takeover offer:
- West Fraser has increased 147.5%
- Interfor has increased 127.8%
- Canfor has increased only 59.35%
In addition (and not included in the above percentages), West Fraser has paid regular dividends, completed two Substantial Issuer Bids (SIB), and ongoing share purchases under its Normal Course Issue Bid (NCIB).
Interfor has paid a special dividend, fully exhausted it's NCIB, and is in the process of completing a SIB.
In terms of growth:
- Interfor has increased its capacity from 2.4 billion board feet to 4.7 billion board feet.
- West Fraser has become the largest OSB producer with a 31% market share.
Canfor has done very little.
- Has Canfor paid any dividends? No
- Has Canfor bought back any significant amount of shares? No
- Has Canfor make any significant investments which has increased their market share? No
Look at what the other forestry companies have done since 2019:
- Domtar was acquired by Paper Excellence;
- Resolute was acquired by Paper Excellence;
- Norbord was acquired by West Fraser;
- Angelina Forest Products was acquired by West Fraser;
- Eacom was acquired by Interfor;
- Georgia Pacific mills were acquired by Interfor;
- Interfor acquired a foothold in Greenfirst.
What has Canfor done?
Urbana, AR modernization (assume 25% complete) - invested $32,500,000 USD
Sale of MacKenzie, BC site and forest tenure - generated sale proceeds of $53,000.000 USD
Millar Western acquisition totaling $323,000,000 USD
DeRidder, LA greenfield mill (assume 50% complete) - spent 80,000,000 USD
Total: 381,000,000 USD of value proposition
It's pathetic when compared to WFG, IFP, and RFP.
Canfor is sitting on $1.267 billion (as of end of Q2) and missed out on tremendous opportunities.
What has management of Canfor done? Next to nothing. Why? Because I suspect they want to suppress the share price so that Don Kayne's overlord Jimmy Pattison can get it for a steal.